- 3 - Between the years 1964 and 1982, petitioner invested money with Mr. Sheets approximately two or three times per year. Petitioner experienced a favorable rate of financial success with Mr. Sheets' investment suggestions, which consisted primarily of real estate investments such as land development. During 1982, Mr. Sheets approached petitioner about investing in Blythe II, which was being promoted as an agricultural research and development partnership. Blythe II was the first agricultural type investment opportunity that had been proposed by Mr. Sheets for consideration by petitioner. Mr. Sheets provided petitioner with a fairly voluminous private placement memorandum2 (the offering), which described the proposed investment in, and the activities to be conducted through, Blythe II. Petitioner admittedly only scanned the document and did not carefully read each page. Instead, petitioner passed along the offering to his certified public accountant, Gary Mathis (Mr. Mathis), who routinely reviewed petitioner's other investment opportunities. After perusing the offering, Mr. Mathis advised petitioner that Blythe II appeared to be a reasonable investment opportunity and that petitioner should be entitled to deductions for research and development costs, as well as other partnership expenses. 2 The private placement memorandum consisted of some 47 pages, plus 8 exhibits, and a table of contents.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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